PanARMENIAN.Net - Chinese banks may invest up to $5 billion in the next five years in electricity distribution networks in Siberia, RIA Novosti reported, citing a source close to negotiations.

A Russian power company, Russian Grids, has signed a preliminary deal with China’s state grid company, under which annual investments of Chinese banks in the projects of MRSK Sibiri, a subsidiary of Russian Grids, could reach from $500 million to $1 billion, the source said Thursday, May 22.

In September, a joint venture is expected to be established between China and Russian Grids, where the Russian company will have a controlling stake. Now talks are underway that the banks’ annual interest rate will be fixed at 3.5 percent.

China will participate in the construction and reconstruction of electricity distribution networks, which could be managed by the Chinese side in future, the source said.

OJSC MRSK Sibiri transports electricity though distribution networks and connects consumers in the Russian republics of Altai, Buryatia, Tyva, Khakassia and the Altai, Zabaykalsk, Omsk, Kemerovo and Tomsk regions. In the wake of current standoff between Russia and the West over the Ukrainian crisis Moscow and Beijing have been cementing their business ties.

A number of documents in trade and economic, energy and humanitarian fields were signed during President Vladimir Putin’s visit to China on May 20-21.